Potential tax ratio, tax effort and tax inefficiency in the OECD: an empirical study using the stochastic tax frontier model
Source: Australian Tax Forum Journal Article
Published Date: 1 Jul 2022
There is a considerable literature on the determination of a country's tax ratio (i.e. ratio of tax revenue to GDP) using annual panel data at the country level. However, existing studies tend to be somewhat limited in terms of research approach, explanatory variables and countries under study. In terms of their research approach, most existing studies employ the familiar regression approach with varying techniques of estimation. In terms of explanatory variables, little attention has been paid to those factors that are under the control of the tax authorities such as tax rate or tax complexity and, in terms of countries studied, most empirical studies have focused on developing or transition countries in Asia and Africa.
This article seeks to contribute to the literature on the tax ratio and tax effort by using the stochastic frontier analysis approach to examine the quantitative impact of various determinants of tax ratio and tax collection inefficiency, focusing on OECD member countries from 2005 to 2018. The scope of the article is confined to OECD member states for several reasons. First, it represents a set of developed countries with generally comparable tax systems, especially those belonging to the European Union. Secondly, the OECD provides a wide range of consistent and reliable data of member countries. Thirdly, as mentioned previously, there are few empirical tax ratio studies focusing on developed countries. The data employed in this study are derived from various secondary sources, mainly the OECD and the World Bank.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
- Published By: Binh Tran-Nam, Le Thai-Ha
- Published On:1 Jul 2022
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page